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An empirical analysis on intergovernmental strategic interaction in tax policy: Evidence from capital taxation in Japan

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  • Atsushi Kawamoto

    (Policy Research Institute, the Ministry of Finance, Japan)

Abstract

In this paper, the interrelationship between the capital tax policies of local governments is empirically investigated using a data set from Japan. Reaction functions of local governments, which relate their capital tax rates to those in competing governments and their characteristics, are estimated through both the instrumental variable method and maximum likelihood estimation. The results suggest that a positive relationship exists among local governments in Japan.

Suggested Citation

  • Atsushi Kawamoto, 2012. "An empirical analysis on intergovernmental strategic interaction in tax policy: Evidence from capital taxation in Japan," Discussion papers ron238, Policy Research Institute, Ministry of Finance Japan.
  • Handle: RePEc:mof:wpaper:ron238
    as

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    File URL: http://warp.ndl.go.jp/info:ndljp/pid/10248500/www.mof.go.jp/pri/research/discussion_paper/ron238.pdf
    File Function: First version, 2012
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    References listed on IDEAS

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    14. Masayoshi Hayashi & Robin Boadway, 2001. "An empirical analysis of intergovernmental tax interaction: the case of business income taxes in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 481-503, May.
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